Wednesday, October 20, 2010

Over two years after it first filed suit, Kansas City Premier Apartments, Inc. finally had its day in court earlier this year with the Missouri Real Estate Commission (here's my last pre-trial post). During the trial, the MREC failed to prove that any of the property advertisements on the KCPA website were false or misleading, or that KCPA's rental advisors conveyed any false or misleading information about specific rental units.

However, in a six page judgment remarkably short on reasoning, Missouri Circuit Judge Abe Shafer held that KCPA is not exempt from the restrictions and requirements of Missouri's real estate broker statute. Specifically, the court ruled that KCPA is not exempt from the statutory definition of a real estate broker, and that the statutory provisions challenged by KCPA were not unconstitutional under the U.S. or Missouri constitutions.

In response to MREC's request for injunctive relief, the court directed that "until KCPA complies with the requirements of Chapter 339 applicable to KCPA operations," it is enjoined from:

Contracting with property owners to receive compensation in return for referring prospective tenants who rent from property owners, which is not an enforceable contract under the terms of Section 339.160, RSMo.

KCPA was also enjoined from "paying a reward or incentive to tenants who notify property owners that they were directed to the property through KCPA's services, which would violate Section 339.00.2(13) if performed by a licensed real estate broker."

KCPA's attorneys have appealed the ruling to the Missouri Supreme Court. Stay tuned.